Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/93797
Authors: 
Fan, Cuihong
Wolfstetter, Elmar G.
Year of Publication: 
2006
Series/Report no.: 
SFB/TR 15 Discussion Paper 166
Abstract: 
We consider the procurement of a complex, indivisible good when bid preparation is costly, assuming a population of heterogeneous contractors. Shortlisting is introduced to implement the optimal number of bidders, and we explore whether the procurer should reimburse the nonrecoverable cost of preparing a bid in whole or in part. We find that a reimbursement policy is profitable for the procurer only if performance and bidding costs are negatively correlated. Moreover, negative rebates (entry fees) always dominate positive rebates.
Subjects: 
Procurement
Auctions
Entry
JEL: 
D44
D45
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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